7 Economists, Bankers Who Challenged the Status Quo

These leaders are the brains behind the marketing tools and innovative business management information farmers enjoy today.

To say that agriculture has experienced change since the inception of Top Producer is a gross understatement. The 30 brave thinkers we have chosen to represent the dramatic changes during the past three decades have all left big footprints on production agriculture.

Art Barnaby. The creative genius behind crop insurance revenue protection, the single most important change in the history of the program going back to the Dust Bowl, is Barnaby. Revenue protection was born out of necessity and crisis in 1989. "That year, Kansas wheat yields were 50% of the state average," says Barnaby, a Kansas State University ag economist. "At the time we had target prices and deficiency payments, neither of which would cover yield loss to that magnitude or be effective because wheat prices skyrocketed due to production losses in Kansas." That’s when Barnaby came up with the idea that producers need to be able to protect income with crop insurance. Eventually, USDA’s Risk Management Agency picked up the idea and made revenue protection available to producers nationwide. "I thought we might capture 5% of producer elections when it was introduced in 1996, but it was the No. 1 seller in Iowa and Nebraska," Barnaby says. So important has revenue protection become that in 2012, despite significant yield losses, there were no major calls for ad hoc aid, even in an election year.

Mike Boehlje. An award-winning ag economist and professor at Purdue University, Boehlje has shaped how farmers think of their farm business. Prior to his work, farm management was largely focused on production and enterprise analysis. Boehlje changed that by bringing the business management approach taught by leading business schools to production agriculture. "This is a different mindset than what agriculture has historically had," Boehlje says. In his 35-year career, he has taught farmers to think strategically, with a clear vision statement and a focused strategy for creating value for customers. Boehlje has been out front explaining to farmers that they manufacture raw products and should learn from the manufacturing approach of other businesses. This includes using contracts rather than the open market to link buyers and suppliers. When it comes to risk management, Boehlje has also been a leader in helping farmers think beyond the traditional price and yield risks to consider strategic risks that could affect their farm’s profitability and future success.

Larry Buegler. Dubbed "The Miracle Worker" in a 1991 Top Producer headline, Buegler is responsible for developing radical ideas, eschewed by many, that stopped regulators from shutting down the St. Paul Farm Credit Bank in 1987. He was a key player in crafting federal legislation that helped protect the entire Farm Credit System. "We were losing $3 million a day," Buegler says. This loss was a result of non-performing loans by farmers who couldn’t make their payments, through no fault of their own, and farmland the bank owned but couldn’t sell in a depressed market. As CEO of the St. Paul FCS Bank from 1986 to 1992, Buegler developed several novel ideas. First, he reasoned it better for farmers to pay something on loans and stay on the land than pay nothing, which lead him to embark on a creative strategy to write down debt and restructure loans to the point where farmers could make payments. This allowed the bank to participate in the upside of asset values once farmland prices recovered. Second, taking a page from automobile companies, he implemented an aggressive plan to sell bank-owned farmland at zero down and 4.9% interest, roughly half of the market rate. Buegler needed to buy time for his plan to work, so he camped out in Washington for three months and lobbied lawmakers for help in holding back regulators. Lawmakers listened, the plan worked and it became a model.

Dennis Inman. Three decades ago, the only tools that farmers had to sell their grain was the cash market and Chicago Board of Trade futures contracts. Today, the number of marketing tools has radically increased. Since 1996, Inman has been on the frontlines of new development. "A lot of farmers were telling us back then they’d just like to get the average price," says Inman, now a vice president at Cargill AgHorizons. This feedback triggered Inman to develop and implement Cargill’s Average Plus Contract, allowing corn, soybean and wheat producers to use the contract to obtain and exceed the average price from February through July. The contract proved popular but no longer exists. It’s been replaced by 25 to 30 contracts that use various pricing mechanisms, including contracts that guarantee minimum prices for those three commodities and grain sorghum. Inman also helped develop ProPricing contracts, in which Cargill traders market a specific number of bushels for producers. Speaking of the need for new pricing tools, Inman says, "commodity price risk has increased greatly since 1983."

Dave Kohl. For more than two decades, Kohl worked in the classroom on the Virginia Tech campus as a professor of agricultural finance and small business management and entrepreneurship in the Department of Agricultural and Applied Economics. He retired from teaching in 2003. Now, as professor emeritus he has traveled 8 million miles hosting more than 6,000 workshops and seminars for various agricultural groups. He has published four books and 1,200 articles on financial and business-related topics in various publications. Throughout his career, Kohl has received 11 major teaching awards and is a two-time recipient of the American Agricultural Economics Association’s Outstanding Teaching Award. He is also one of the top-rated instructors in agricultural finance and banking, training more than 700 lenders using an online and face-to-face educational approach.

Danny Klinefelter. During his lifelong tenure at Texas A&M University, Klinefelter has advised thousands of producers nationwide about the best farm management practices. An agricultural economist by trade, he has become a popular speaker. While these are notable accomplishments, Klinefelter is best known for the creation of The Executive Program for Agricultural Producers (TEPAP). More than 1,700 producers have completed the two-week program, representing 8% of the U.S. farm population. The program is unique in that it is not commodity focused; it focuses entirely on the business of farming. While under the auspices of Texas A&M, TEPAP instructors are the best nationwide experts Klinefelter can find, some agriculture, some strictly business. The program’s success has led to the formation of the Association of Agricultural Production Executives (AAPEX) for TEPAP alumni. "Half the value of TEPAP and AAPEX is what producers learn from each other," he says. Klinefelter is also an advocate of peer advisory groups, where groups of eight to 10 producers, often from different regions, get together to work on problem-solving and explore opportunities.

John Marten. Despite the fact that Marten had a Ph.D. in economics, the late Farm Journal economist could see the forest for the trees and cut right to the farmer’s bottom line. Whether it was a futures hedge or how to farm the Payment in Kind (PIK) program, he could explain the concept in terms anyone could understand and predict how farmers would react. He was often consulted behind the scenes by policymakers and regulators when developing the farm programs of the day. No less than his ability to communicate in print or casual discussion was his presence on the stage. Economics might be called the dismal science but Marten made it entertaining as well as informative. Terms he coined such as the "inverse thrill" of margin calls are used by others to this day. Marten died in his 50s of ataxia, a degenerative disease of the nervous system.